Aviva/BAA12 Vs. Others...

[jmarkk1]

I'm trying to wrap my head around the BAA12 product from Aviva/Annexus vs. other annuities out there.

I'm not real comfortable with the high fees for the BAA, but the question I have is whether or not the fees (2.95% on option A or 60/40) is worth paying because there is no cap. My guess is that this is something a client might pay for if market is doing well and paying 2.95% for no caps might be worth it. If market isn't doing well and goes up 5%...with BAA you lose 2.95% and don't get the 5% gain. What to do?

If I want to do a monthly pt. to pt. or monthly average that has caps, etc. could I do better than the BAA after fees?

Other than the BAA product out there, what other FIA's have good track records on cash growth? (Income riders aside)

I've looked into North American Charter 10, NWL Global Lookback, and Athene Enhanced 12.

 

[Norwayguy]

True no cap but if they force a portion into fixed paying only 1% then that is a way to limit upside potential.

 

[jmarkk1]

I understand that 40% goes into fixed side, but if given the scenario that a client wants to put 60/40 then it seems like having no caps is a pretty good idea even with a 2.95% fee.

Most fixed accounts that I've seen aren't much more than 1% right now.

I really like the BAA12 if client likes the 60/40 approach and the income rider is pretty good too. Especially the SGO.
(plus if FER is elected they get 5% bonus...not bad...but there are other annuities out there that have some good features too)

 

[francodevivo]

My real concern outside of the fees on this product is the 2 year reset. I am not a fan of that, especially with the market continuing to get lower.

I'd rather see someone with the ability to lock in their gains annuals (if there are any).

I also here that most people want to get into an indexed annuity from their VA because of the fees.

The 60/40 no cap is not an issue for a lot of folks, but realistically, the net return is going to end up around the same as alot of other annuities.

 

[sman]

especially with the market continuing to get lower.

The market is continuing to get lower? Really? Can you clarify? Since March 2009 it has doubled in value.

This isn't a comment on the product in question just an observation about your comment that the market is "continuing to get lower". I don't see it. That isn't to say that it won't go lower from where it is, nor is it to say that it will go higher.

 

[Newby]

The fees on the BAA aren't really fees. They are spreads. They only come out of gains and aren't charged unless the product gains something to pay it with.

I liked the BAA more before they adjusted it recently. I have one that just hit the 2nd year anniversary in July. The client locked in a 10% growth over the 1st 2-years (5-% per year) after all spreads. He is thrilled to have no risk and this increase. He took the stripped down version. No frills.

I think it's a good product overall. Lots of other good news out there too.

 

[jmarkk1]

The fees on the BAA aren't really fees. They are spreads. They only come out of gains and aren't charged unless the product gains something to pay it with.

I liked the BAA more before they adjusted it recently. I have one that just hit the 2nd year anniversary in July. The client locked in a 10% growth over the 1st 2-years (5-% per year) after all spreads. He is thrilled to have no risk and this increase. He took the stripped down version. No frills.

I think it's a good product overall. Lots of other good news out there too.

Can you clarify how this spread works within lets say option A?
60/40? Which is 2.95% right now...

 

[Newby]

Can you clarify how this spread works within lets say option A?
60/40? Which is 2.95% right now...

If they gain zero, the fee is zero.

If they gain 1% the fee is 1%

If they gain 2.95 the fee is 2.95%

If they gain more, they get their % above the fee.

You really need to discuss it with your upline. It's one of many things to understand with this annuity. Ask to go to the Scottsdale, AZ training. You learn quite a bit that way.

 

[jmarkk1]

If they gain zero, the fee is zero.

If they gain 1% the fee is 1%

If they gain 2.95 the fee is 2.95%

If they gain more, they get their % above the fee.

You really need to discuss it with your upline. It's one of many things to understand with this annuity. Ask to go to the Scottsdale, AZ training. You learn quite a bit that way.

What I meant in terms of clarification was how this fee played out with 2 yr. crediting. Is fee applied as you stated every 2 yrs. to mirror the crediting method? or is this done yearly?

 

[MAnnuity]

Yes, I too am curious if the 2.95% spread is applied annually or is it a 2-yr spread since it's a 2-yr strategy?

Also, I understand that a certain % of the money is allocated into a fixed account and a certain % is allocated into the indexed account- but what I've never been able to figure out is what actual STRATEGY Annexus is using within the indexed account? ie is it a point to point, or are they using averaging, etc?